Talking Points:
– USD/JPY Climbs to Fresh High as Tax-Hike Delay Raises Threat of Snap Election.
– NZD/USD Continues to Carve Lower-Highs; Will RBNZ Wheeler Retain the Verbal Intervention?
– USDOLLAR Holds Above 23.6% Fib Retracement Ahead of Fed Rhetoric.
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USD/JPY
Chart – Created Using FXCM Marketscope 2.0
USD/JPY advances to a fresh monthly high of 116.09 amid growing talks of snap election in December as Japanese Prime Minister Shinzo Abe looks to delay the next sales-tax hike.
Long-term outlook for the Yen remains bearish as the Bank of Japan (BoJ) further expands asset-purchase program; USD/JPY may continue to work its way towards the October 2007 high (117.93) especially as the Relative Strength Index fails to preserve the bearish formation from back in September.
The DailyFX Speculative Sentiment Index (SSI) shows retail-crowd has been net-short USD/JPY since November 4, with the ratio current standing at -1.32.
NZD/USD
In light of the ongoing series of lower-highs in NZD/USD, bearish outlook remains favorable especially as the Relative Strength Index (RSI) fails to establish a bullish trend.
NZD/USD remains vulnerable to further losses as Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler retains the verbal intervention on the kiwi.
Downside targets will remain in focus for NZD/USD as long as RBNZ retails a wait-and-see approach, with the next region of interest coming in around 0.7610-20 (50% expansion).
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Read More:
Price & Time: Big Test Coming Up For Crude
COT: Euro Positioning Close to a Record
USDOLLAR(Ticker: USDollar):
Index
Last
High
Low
Daily Change (%)
Daily Range (% of ATR)
DJ-FXCM Dollar Index
11244.93
11290.79
11243.61
-0.15
79.35%
Chart – Created Using FXCM Marketscope 2.0
Dow Jones-FXCM U.S. Dollar Index carving narrowing range amid holiday trade; still waiting to hear from Charles Plosser, Narayana Kocherlakota, Janet Yellen, Stanley Fischer, James Bullard and Jerome Powell.
Despite the short-term wedge formation, the continuation pattern continues to favor the approach to buy dips in USDOLLAR as the Federal Open Market Committee (FOMC) moves away from its easing cycle.
Will continue to look for higher-lows in USDOLLAR to favor another run at 11,312 (78.6% retracement) to 11,315 (78.6% expansion) along with the RSI trading back in overbought territory.
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Release
GMT
Expected
Actual
NFIB Small Business Optimism (OCT)
12:30
96.0
96.1
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— Written by David Song, Currency Analyst
To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.
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Source: Daily fx